Revenue's Appeal Dismissed on Claim Disallowance Under IT Act

The Revenue's appeal against the disallowance of the assessee's claim under s. 80HHC of the IT Act for income from interest and rent for the assessment year 1990-91 was dismissed. The Tribunal upheld the CIT(A)'s decision, stating that the amounts were part of the assessee's business income and could be excluded only from 1st April, 1992, following the insertion of sub-clause (baa) to the Explanation of s. 80HHC. The Tribunal found that the interest and rent income were related to the normal business activities of the assessee, in line with a Supreme Court decision and the legislative intent to exclude such income from s. 80HHC benefits from the specified date.

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Issues involved: Appeal against disallowance of benefit under s. 80HHC of the IT Act, 1961 for income from interest and rent for asst. yr. 1990-91.

Summary:
The Revenue appealed against the Tribunal's order disallowing the assessee's claim under s. 80HHC of the IT Act, 1961 for income from interest and rent. The CIT(A) allowed the appeal, stating that the amounts were part of the assessee's business income and could be excluded only from 1st April, 1992, due to the insertion of sub-cl. (baa) to the Explanation of s. 80HHC. The Revenue challenged this decision before the Tribunal, which upheld the CIT(A)'s order. The Revenue contended that interest and rent income should not be considered part of business income, but the Tribunal found that the deposits and rental income were related to the normal business activities of the assessee. The Tribunal also relied on a Supreme Court decision stating that income from different sources does not cease to be business income for computation purposes. Additionally, the legislative intent to exclude interest and rent income from s. 80HHC benefits from 1st April, 1992, was noted. No other points were raised, and the Court upheld the Tribunal and CIT(A) findings, dismissing the appeal without costs.

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